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Laxman Pai, Opalesque Asia: Year-to-Aug. 31, the number of all-cash transactions involving U.S.-based private equity sellers and target companies soared 89.3% to 301 compared to the same period in 2020, according to S&P Global Market Intelligence data. The number of stock deals over the same period also rose 63.6% year over year.
"The President Joe Biden administration's proposal to hike capital gains tax has spurred a flurry of private equity M&A as privately held companies have extra motivation to sell. Under the proposal, the capital gains tax would increase to 39.6% from the current rate of 20%, or to 43.4% from 23.8% if the net investment income tax is taken into account," it said.
Despite the potential for a near-doubling of capital gains tax, Bristow and McNeely both believe that the private equity playbook of seeking assets that maximize investor returns is likely to remain the same over the next year.
Private equity SPAC involvement grows
Of the 493 SPAC IPOs recorded so far in 2021, 80 are backed by private equity/venture capital firms with an ownership interest of at least 5%, according to Market Intelligence data. In all of 2020, there were 44 such IPOs out of 304 total SPAC offerings.
Prominent private equity firms such as Blackstone Inc., Apollo Global Management Inc., KKR & Co. Inc., Fortress Investment Group LLC, TPG Capital LP, and Warburg Pincus LLC have been behind some of the most notable SPACs launched in the las...................... To view our full article Click here
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